Section 276B of the Income Tax Act, 1961, addresses the consequences for failing to remit Tax Deducted at Source (TDS) to the Central Government within the prescribed timeframe. This provision underscores the importance of timely TDS payments and outlines the legal repercussions for non-compliance.
Key Provisions of Section 276B:
1. Obligation to Deposit TDS:
- Any person responsible for deducting tax at source under Chapter XVII-B of the Income Tax Act is required to deposit the deducted amount to the credit of the Central Government within the stipulated period.
2. Consequences of Non-Compliance:
- Failure to remit the deducted TDS within the specified time can lead to:
- Imprisonment: A term ranging from a minimum of three months to a maximum of seven years.
- Fine: An additional monetary penalty as determined appropriate.
Recent Amendments:
- An amendment effective from October 1, 2024, provides that if the TDS amount is deposited by the due date for filing the TDS statement for that quarter, prosecution under Section 276B may be avoided.
- Earlier the prosecution provisions technically got applicable for the very next day of the due date of remittance – i.e. if due date is 7th April, from 8th April prosecution provisions was applicable.
After amendment w.e.f. 1st October 2024, this date is extended till due date of filing of the Return.
Section 276B – Prosecution Provision: Then vs Now
A comparison in the table below would be helpful to understand:
| Aspect | Before Amendment (Up to 30-Sep-2024) | After Amendment (From 01-Oct-2024) |
| Trigger for Prosecution | Prosecution could be initiated for any delay, even of a single day in depositing TDS | Prosecution cannot be initiated if the TDS is deposited on or before the due date for filing the TDS return (quarterly statement under Section 200(3)) |
| TDS Paid Within Due Date of Payment (e.g., 7th of next month) | ✅ No prosecution | ✅ No prosecution (same as before) |
| TDS Paid Late but Before TDS Return Due Date (e.g., paid on 15th Oct, return due 31st Oct) | ❌ Prosecution could still be initiated | ✅ Now protected from prosecution |
| TDS Paid After Return Due Date (e.g., paid on 5th Nov instead of 31st Oct) | ❌ Prosecution possible | ❌ Prosecution still possible |
| Discretion | Entirely discretionary; any delay could lead to prosecution, often even for small delays | Now has a defined safe window: deposit by TDS return due date → no prosecution, even if delayed from original deposit date |
| Interest & Late Fees | ✅ Always applicable for delay | ✅ Still applicable — no change |
| Prosecution Window | Open immediately after missing deposit due date (usually 7th of next month) | Opens only after TDS return due date is missed (i.e., grace period granted) |